An information resource is becoming one of the key assets. So why not profit from it? Many companies are transforming their business models through innovation and data monetization. It becomes a central component of success for them, an opportunity to increase operational efficiency, create value and generate additional income.
According to MarketsandMarkets, the size of the global data monetization market will grow to $6.1 billion by 2025 at a CAGR of 21.7%. Axisbits will tell you all about how businesses can adapt to the ever-changing market demands and provide customers and internal users with innovative services and solutions.
What Is Data Monetization?
Data monetization is a set of processes for extracting economic benefits from an information resource. Direct monetization involves the sale of access to data to other third parties in the raw state or in the form of analysis and insights. Typical examples are contact databases with potential business prospects or findings that affect the business.
Much more interesting is indirect monetization, also known as data-driven optimization. This includes analyzing data to identify ideas that improve business performance. Data can determine how to attract customers, understand their behavior so that you can drive sales, save money, avoid risks, and optimize operations.
In addition, there are data-driven business models to unlock new opportunities. Customers benefit from direct access to analytics by offering it as added value or a new level of service.
Why Monetize Data?
Without having a proper data monetization strategy, companies run the risk of missing out on important ideas that can improve their business and enhance their competitive advantage. They allow you to:
- Get new sources of profit. Even if you don't plan on selling your data, monetization can generate new revenue streams. For example, identifying new customer trends can accelerate the creation of a completely new product that meets the identified requirements.
- Streamline Operations: In-depth analysis of production data can help streamline production, as well as reduce waste and unnecessary costs.
- Build strategic partnerships: The results of data analysis can be offered to interested third parties, such as banks and credit institutions, in order to receive favorable terms in return.
Using data monetization tools in any industry helps:
- Improve the quality of service and customer loyalty;
- Improve targeted marketing and offering;
- Increase the value of products and services;
- Identify new points of growth.
Ultimately, such effort translates into real money as you get competitive products that sell really well. Your customers appreciate and willingly buy them, and you can know in which direction to move further in order to stay ahead of the competition.
Use Cases For Data Monetization
Efficient, fast-growing companies have long used fueling growth through data monetization as an important part of their strategies. Here are some examples.
- DTN. The agricultural company specializes in real-time data analysis and delivery. A cloud-based tool is used to process data on the weather in the fields, prices of goods, etc.
- Vodafone. The global mobile data provider that operates with anonymous and aggregated mobile data to provide insight into customer service usage patterns. The information can be useful for planning in the tourism or real estate sector.
- NOS SPGS, Portugal's largest communications and entertainment group, uses anonymous telephone data as soon as a tourist enters the country.
- Uber. With the user's permission, the taxi service may sell location data to food and retail businesses. Other companies may use this data for personalized discounts and promotions.
- Michelin. In addition to tire production, the company publishes tourist maps and travel guides. To expand B2B offerings and generate new revenue streams, both raw tire data (temperature, pressure, GPS, mileage) and analytic data on customer driving behavior are sold.
- Dunnhumby. The lion's share of this analytics company’s revenue (over 140 million per year) comes from selling customer data to help brands and retailers improve customer service. Among the largest consumers are Nestle, Unilever, Metro, Danone.
- Monsanto. Climate Corporation's data analysis platform helps farmers improve their productivity. In 2020, the division reached $100 million in revenues. The company is now using FieldView to turn farm data into additional revenue.
The growing understanding of the potential benefits, as well as the widespread use of data monetization, open up opportunities for growth in a wide variety of industries, including the real economy.
So many people and companies are literally living on gold mines, but they often simply do not see the prospects for large amounts of unused data and ignore the excellent chances for development. Data helps provide new ideas, so it can be a driver of increased profits and new value creation.
Security and privacy concerns are likely to hinder market growth, but you don't have to miss the opportunity! Moreover, you can always use the services of professionals. Axisbits is expert and experienced in this issue. Contact us and we’ll advise you on how to monetize your data and increase profits!